Cuomo May Seek Return of $4 Billion in Early Merrill Bonuses

Jan. 30 (Bloomberg) -- Andrew Cuomo, New Yorkâs attorney general, may demand the return of $4 billion in bonuses paid by Merrill Lynch & Co. just before it was acquired by Bank of America Corp., a person familiar with the matter said.

Cuomo also wants to know what Bank of America Chief Executive Officer Kenneth Lewis, 61, knew about the accelerated bonuses and about Merrillâs surprise $15 billion net loss in the fourth quarter, the person said. Lewis fired Merrillâs CEO John Thain this month after the losses required more federal aid.

Maybe they should have been paid their bonuses in CDO/CMO's. That way it gets the toxic paper off the company's books and the guys who were selling the product can own it.

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Credit Suisse did that. A friend of mine who is an MD there said while his cash bonus was less than he would have liked, he received participation in a pool of toxic assets. He likened it to a lotto ticket. What they did though, was give a dollar equivilent at current CDO/CDS marks. So in other words, if he was due 500K in bonus, he esentially got 2-3x that amount of face value of those insturments, which are trading at a significant markdown. He was actually quite pleased with this arrangement.